Johan Bollen, Huina Mao and Xiaojun Zeng, Twitter mood predicts the stock market, 2011
This article is written by Johan Bollen, Huina Mao and Xiaojun Zeng. These three scientists investigated if it should be possible that a whole nation experiences the same mood at the same time. They also wanted to know how this reflects on the stock market.
They have searched social media for six words: calm, alert, sure, vital, kind and happy. When this information was gathered the scientists have reflected the peaks and dales of the gathered words to the peaks and dales of the stock market. For example, when many people say one or more of these six words, they have concluded that in around 80% of the times the stock value increased, and when people didn’t use these words on social media the stock value decreased or plummeted. But they still underline the fact that it is not possible to predict the stock market, but we can say that there’s a relation between the sentiment displayed on social media and the stock value.
Statistic research proves that the word calm has a significant causal relationship with the stock market, and that it occurs with lags from 2 to 6 days. This means that the market can be predicted by the word calm, but the exact moment of an increase or decrease remains uncertain.
Nino de Moor
Nino de Moor